Could your organization benefit from an employee alumni network?

In recent years, a number of companies — ranging from tech corporations like IBM to global audit, tax and advisory firm network KPMG — have launched programs designed to encourage former employees to keep in touch, both with each other and with the organization.

The goal isn’t to have a prolonged, multi-year exit interview — but to instead network with former employees, who can potentially provide industry updates, job candidates, client referrals and other valuable information.

The concept, according to the Economist, was initiated by global management firm McKinsey, which maintains a database of former consultants, including workers who have accepted new jobs at potential clients’ companies. Its corporate alumni list currently encompasses nearly 30,000 former McKinsey employees located in 125 countries.

For companies hoping to re-recruit top performers who left due to Recession-related reductions or seemingly better opportunities. corporate alumni networks can serve as a way to start the conversation.

That’s one reason, according to Fast Company, why organizations in various industries are using alumni networks to sustain their reputation as a good employer and foster a positive relationship with former employees — who could potentially be enticed back during the company’s next growth period.

Alumni Advantages

Corporate alumni networks can cost both time and money. Many organizations set up a separate website and send out regular emails, publications and other items to keep in contact with former employees. Some also establish loyalty programs that feature amenities, or sponsor regular in-person and online networking and education events.

The investment, though, may be worthwhile, when you consider the advantages gained by hiring an extremely qualified worker who already knows how your organization works.

Training costs will likely be reduced; employee retention efforts and productivity may also benefit. Rehired employees are 40 percent more productive in their first quarter, tend to stay longer — and cost half as much to hire as brand new workers, according to the Harvard Business Review. Its research suggests a Fortune 500 company could save $12 million a year by pursuing former employees.

If your organization could benefit from increased productivity and similar retention gains, and you’re ready to set up a system to keep in contact with former employees, the following tips can help you effectively structure your corporate alumni network:

Offer former employees incentives to join: Take Microsoft’s cue — the tech corporation gives former part- and full-time employees special benefits, ranging from product, restaurant and vendor discounts to member-only events, for a $99 or $125 premium annual membership fee.

Find manageable ways to keep in contact: If you can’t, due to a lack of resources or other issues, establish and run a comprehensive, regularly updated employee alumni network, the Society for Human Resource Management suggests a less time-consuming approach — creating a semi-regular publication for former employees or including them on your company’s e-newsletter distribution list.

Consider favoring open, instead of closed doors: Asking former employees to sign up for your corporate alumni network is a key way of obtaining their contact information (and keeping in touch). Some companies, though, are opting for a broader approach — which may help you encourage former employees and external parties to participate. On Accenture’s alumni network website, for example, site visitors don’t have to register to share job openings with former employees who have worked at the consulting firm. As a result, employers and other entities who aren’t alumni can share lucrative job leads with the company’s alumni network, who’ll benefit from the information.

A robust alumni network can potentially help you find qualified candidates for open positions. However, a corporate alumni network will likely be most successful when combined with other recruitment efforts.

Creating an ongoing talent pipeline program, for example, can help you move quickly when a position needs to be filled. Social media recruiting can also help you reach candidates in different, creative ways.

For more thoughts on strengthening your current recruitment and employee retention efforts, find out how you can solve your most critical internal and external talent pool issues in our recent blog post.